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Where do you stand on cost and profit-measurement systems?

20 Jun 2008

Over the past 20 years, private and public sector industries have been working hard to better understand cost and profitability. During this time, new systems were developed, allocation methods changed, activities researched, customers surveyed, and more. What was the outcome? Is there a better understanding of cost and profitability behaviour?

ACCA is assisting with a new costing and profitability study. Conducted by the Business Research and Analysis Group (BRAG), it aims to provide an up-to-date picture of the state of cost and profit-measurement systems.

Professor Bill Stratton of Dixie State College of Utah and a member of the BRAG team indicated that they are looking to uncover new information about costing and profitability. Answers to questions such as:

• what functionality should an ideal cost/profitability system have?
• what are the major concerns with current cost/profitability systems?
• what percentages of incurred costs are directly traced versus indirectly traced to the organisation's final cost objects?
• what percentage of costs are unallocated?
• what method(s) are used to allocate indirect costs?
• what decisions are being made using information from cost/profitability systems?

Previous studies by Stratton's group revealed practices in the business use of scorecards. This resulted in several articles in professional journals and a book on the topic.

ACCA invites all of its members to participate in this study. The study tool  is available until 31 July 2008.

There is no cost to participate and all published results will be shared with survey respondents.

Any questions concerning this study can be e-mailed to info@bragstudies.com